Brexit secretary says a no-deal Brexit now less likely

From left, Britain's Secretary of State for Exiting the European Union David Davis, Britain's Prime Minister Theresa May, European Commission President Jean-Claude Juncker and European Union's chief Brexit negotiator Michel Barnier meet at the European Commission in Brussels, on Friday, Dec. 8, 2017. British Prime Minister Theresa May, met with European Commission President Jean-Claude Juncker early Friday morning following crucial overnight talks on the issue of the Irish border. (Eric Vidal, Pool Photo via AP)
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Associated Press

LONDON (AP) — The likelihood of Britain leaving the European Union without a future trade deal has “dropped dramatically” now that the two sides have reached a preliminary agreement on their divorce terms, the country’s Brexit secretary said Sunday.

The deal hammered out by Prime Minister Theresa May last week means the negotiations on Britain’s March 2019 departure from the EU can move onto the next phase, Brexit Secretary David Davis told the BBC.

The progress should give Britain enough time to negotiate a free-trade agreement for once it is outside the EU, making it unlikely the country will have to fall back on World Trade Organization rules that would impose tariffs, he said.

“The odds, as it were, against a WTO, or no-deal outcome, have dropped dramatically,” Davis said.

The risk of Britain crashing out of the EU without a deal has raised concern among business leaders who feared such a result would hamper trade and investment and weaken the nation’s economy.

The danger of a no-deal Brexit would have been much greater without last week’s agreement on so-called divorce issues, including citizen’s rights and the Irish border, because the preliminary talks could have stretched on for months, leaving negotiators short of time to complete an agreement before the 2019 deadline, Davis said.

The government’s goal is to maintain tariff-free access to the EU market for both goods and services, which make up a large part of the British economy. Critics have argued that time already is too short, citing the case of Canada, which took seven years to negotiate a free-trade deal with the EU.

Davis disagreed, saying it will be easier for Britain because the country’s rules and regulations are already aligned with EU rules after 40 years of membership.

“We start in complete alignment, we start in complete convergence, with the EU and we then work it out from there,” he said. “The thing is how we manage divergence … so it doesn’t undercut access to the market.”

However, Davis noted that no deal terms would be iron-clad until everything is agreed upon — underscoring a caveat in the deal announced Friday.

Asked what would happen if Britain weren’t able to reach a final Brexit deal, Davis said Britain wouldn’t necessarily be bound by the commitments it made in the preliminary agreement, including provisions on the Irish border.

Britain has guaranteed that Northern Ireland, which will have the U.K.’s only land border with the EU after Brexit, would remain in “full alignment” with EU rules to ensure the border remains open and trade between the two parts of Ireland isn’t impeded.

Some have asked whether that means Britain as a whole will have to remain part of the EU’s single market and customs union, undercutting the government’s promise to leave the 28-nation bloc.

Pressed on the contradictory statements, Davis said Britain still plans to leave both the single market and the customs union. While the agreement May reached ensures that standards on goods and services will remain very close to those in the EU, the British government will decide how to achieve that goal, he said.

The comments are already causing issues in Dublin, where Irish Prime Minister Leo Varadkar had described statements on avoiding a hard border in last week’s deal as being “cast iron.”

The Irish government’s chief whip, Joe McHugh, branded Davis’ comments as “bizarre.”

“My question to anybody within the British government would be, why would there be an agreement, a set of principled agreements, in order to get to phase two, if they weren’t going to be held up? That just sounds bizarre to me,” McHugh said. “This, as far as we’re concerned, is a binding agreement, an agreement in principle.”